Houston expert: Can Houston replicate and surpass the success of Silicon Valley?

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Houston can learn a lot from the decades of success from Silicon Valley, according to this Houston founder, who outlines just what all the city needs to do to become the startup city it has the potential to be. Photo via Getty Images

Anyone who knows me knows, as a Houston Startup Founder, I often muse about the still developing potential for startups in Houston, especially considering the amount of industry here, subject matter expertise, capital, and size.

For example, Houston is No. 2 in the country for Fortune 500 Companies — with 26 Bayou City companies on the list — behind only NYC, which has 47 ranked corporations, according to Fortune.

Considering layoffs, fund closings, and down rounds, things aren’t all that peachy in San Francisco for the first time in a long time, and despite being a Berkeley native, I’m rooting for Houston now that I’m a transplant.

Let’s start by looking at some stats.

While we’re not No. 1 in all areas, I believe we have the building blocks to be a major player in startups, and in tech (and not just energy and space tech). How? If the best predictor of future success is history, why not use the template of the GOAT of all startup cities: San Francisco and YCombinator. Sorry fellow founders – you’ve heard me talk about this repeatedly.

YCombinator is considered the GOAT of Startup Accelerators/Incubators based on:

  1. The Startup success rate: I’ve heard it’s as high as 75 percent (vs. the national average of 5 to 10 percent) Arc Search says 50 percent of YC Co’s fail within 12 years – not shabby.
  2. Their startup-to-unicorn ratio: 5 to 7 percent of YC startups become unicorns depending on the source — according to an Arc Search search (if you haven’t tried Arc Search do – super cool).
  3. Their network.

YC also parlayed that success into a "YC Startup School" offering:

  1. Free weekly lessons by YC partners — sometimes featuring unicorn alumni
  2. A document and video Library (YC SAFE, etc)
  3. Startup perks for students (AWS cloud credits, etc.)
  4. YC co-founder matching to help founders meet co-founders

Finally, there’s the over $80 billion in returns, according to Arc search, they’ve generated since their 2005 inception with a total of 4,000 companies in their portfolio at over $600 billion in value. So GOAT? Well just for perspective there were a jaw-dropping 18,000 startups in startup school the year I participated – so GOAT indeed.

So how do they do it? Based on anecdotal evidence, their winning formula is said to be the following well-oiled process:

  1. Bring over 282 startups (the number in last cohort) to San Francisco for 90 days to prototype, refine the product, and land on the go-to-market strategy. This includes a pre-seed YC SAFE investment of a phased $500,000 commitment for a fixed min 7 percent of equity, plus more equity at the next round’s valuation, according to YC.
  2. Over 50 percent of the latest cohort were idea stage and heavily AI focused.
  3. Traction day: inter-portfolio traction the company. YC has over 4,000 portfolio companies who can and do sign up for each other’s companies products because “they’re told to."
  4. Get beta testers and test from YC portfolio companies and YC network.
  5. If they see the traction scales to a massively scalable business, they lead the seed round and get this: schedule and attend the VC meetings with the founders.
  6. They create a "fear of missing out" mentality on Sand Hill Road as they casually mention who they’re meeting with next.
  7. They block competitors in the sector by getting the top VC’s to co-invest with then in the seed so competitors are locked out of the A list VC funding market, who then are up against the most well-funded and buzzed about players in the space.

If what I've seen is true, within a six-month period a startup idea is prototyped, tested, pivoted, launched, tractioned, seeded, and juiced for scale with people who can ‘make’ the company all in their corner, if not already on their board.

So how on earth can Houston best this?

  1. We have a massive amount of businesses — around 200,000 — and people — an estimated 7.3 million and growing.
  2. We have capital in search of an identity beyond oil.
  3. Our Fortune 500 companies that are hiring consultants for things that startups here that can do for free, quicker, and for a fraction of the extended cost.
  4. We have a growing base of tech talent for potential machine learning and artificial intelligence talent
  5. A sudden shot at the increasingly laid off big tech engineers.
  6. We have more accelerators and incubators.

What do we need to pull it off?

  1. An organized well-oiled YC-like process
  2. An inter-Houston traction process
  3. An "Adopt a Startup" program where local companies are willing to beta test and iterate with emerging startup products
  4. We have more accelerators but the cohorts are small — average five to 10 per cohort.
  5. Strategic pre-seed funding, possibly with corporate partners (who can make the company by being a client) and who de-risk the investment.
  6. Companies here to use Houston startup’s products first when they’re launched.
  7. A forum to match companies’ projects or labs groups etc., to startups who can solve them.
  8. A process in place to pull all these pieces together in an organized, structured sequence.

There is one thing missing in the list: there has to be an entity or a person who wants to make this happen. Someone who sees all the pieces, and has the desire, energy and clout to make it happen; and we all know this is the hardest part. And so for now, our hopes of besting YC may be up in the air as well.

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Jo Clark is the founder of Circle.ooo, a Houston-based tech startup that's streamlining events management.

As much as leaders may wish the labor market were not so competitive, it is important to accept the reality and take action. Photo via Getty Images

How Houston businesses can attract tech talent amid a tight labor market

guest column

It is no surprise to recruiters that, despite high profile layoffs at major corporations, the labor market remains tight, especially in the tech industry.

According to data from McKinsey from the first half of this year, more than 80 percent of tech workers who were laid off found a new job within three months. Many of them found jobs outside of the tech industry, where technically skilled employees are in increasingly high demand.

If small businesses want to remain competitive, they need to evolve their hiring strategies. One answer to expanding the talent pool is skills-based hiring. Unlike traditional recruitment, which focuses mainly on applicants with college degrees or direct experience in their field, a skill-based hiring approach prioritizes specific competencies.

Research from LinkedIn revealed employers who practice skills-based hiring are 60 percent more likely to have success with hiring. A winning skills-based hiring strategy will identify diverse candidates, promote internal upskilling and accelerate the hiring process.

Find diverse candidates

Conventional hiring strategies tend to overlook many of the diverse candidates who benefit from skills-based hiring. One important aspect of skills-based hiring is connecting with these groups, who may not apply through traditional pipelines like online applications, employee referrals, or job fairs.

For example, candidates such as veterans, parents reentering the workforce and people without a college degree may not have the same connections as traditional applicants. Yet they often bring transferable skills and an ability to learn, enabling them to succeed in the role.

To expand their talent pool, businesses can start by connecting with organizations and events in Houston that target diverse groups. For example, the Texas Veterans Commission recommends that employers reach out to their local Texas Workforce Solutions Center to link with veterans seeking employment.

By making an effort to connect specifically with underrepresented groups, small businesses and startups can quickly deepen their pool of available talent.

Provide internal upskilling

Skills-based hiring focuses on the competences employees have already. Through upskilling, however, employers can internally train candidates to take on a new role or hire candidates with strong learning potential. Upskilling is the practice of offering ongoing learning and development (L&D) opportunities to employees to close skill gaps.

Upskilling opportunities cannot only expand the talent pool by enabling employers to train candidates on the job. They can also attract more applications across the board because they are in high demand from job candidates. The American Upskilling Study from Gallup found 57 percent of workers were “extremely” or “very” interested in an upskilling program, especially Black and Hispanic workers.

For small businesses trying to stay competitive, upskilling is an essential component of a skill-based hiring approach.

Accelerate the hiring process

Time-to-hire is telling about the effectiveness of an organization’s recruitment process. When recruitment drags on too long, candidates may accept another offer or grow disengaged with the process. Meanwhile, open roles may go unfilled. Unsurprisingly, LinkedIn data has found over six in 10 HR leaders named time-to-hire as their most important metric for success.

Small businesses and startups who want to increase their competitiveness should start by calculating their current time-to-hire. Once they understand the situation, they can analyze their approach for weaknesses.

Some of the most effective solutions to improve time-to-hire could include redesigning the application process, streamlining interviews, implementing an applicant tracking system or refining job descriptions. The goal is a highly efficient recruitment process that identifies qualified candidates and puts out an offer as soon as possible.

As much as leaders may wish the labor market were not so competitive, it is important to accept the reality and take action. Much like larger corporations, small businesses and startups will find the upper echelon of talent when they embrace skills-based hiring as the future of recruitment.

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Jill Chapman is a director of early talent programs with Insperity, a leading provider of human resources and business performance solutions.

A Houston HR expert shares three tips for hiring top talent in a competitive market. Photo via Getty Images

How Houston small businesses can stand out when competing for in-demand talent

Guest column

As the economic recovery gears up, small business owners increasingly need to hire and retain the best talent available in their industry. The challenge for small- and medium-sized business owners is how to compete with large corporations that offer competitive compensation and benefits packages. The key is appealing to top-notch talent in a historically deep candidate pool -- and company culture can help small businesses stand out.

It has been proven that when small business owners concentrate on culture, identify what motivates employees and enjoy getting the job done, top-notch talent will follow.

Below are a few ideas for how small businesses can complete for top-notch talent:

Shape a winning company culture

Company culture means more than state-of-the-art facilities and amenities like free snacks. Company culture is an experience that will become part of the employee identity. Culture embodies many aspects of the organization including opportunities for advancement, company leadership and values. These details and more can shape a company's culture.

Small business owners also should try to look beyond the job description to identify like-minded individuals who align with the company's values. Employees who are strongly aligned with the company's mission can foster a positive workplace and a team that is happy, engaged, productive and committed. Top performers will be much more inclined to join the team and stay for longer tenures when given an opportunity to develop and advance in an uplifting environment.

Get attention with uncommon benefits

​Agility is a tremendous advantage that small businesses have over their larger counterparts in the competition for top talent. Benefits unique to small businesses include accessible senior leadership and quick timelines for advancement. These and other advantages to small businesses can tip talent in their favor in lieu of the potential competition's higher salary.

Today, more traditional benefits have progressed to include mental, physical and emotional health and wellbeing. Small businesses can consider creating or updating an Employee Assistance Program (EAP). Through an EAP, employers can offer unique benefits such as online therapy sessions or meditation apps. Additional offerings can include telemedicine services, expanded sick-leave, financial wellness programs or childcare assistance. Even more generous programs include online fitness subscriptions, free food delivery, streaming services memberships or reimbursement for remote-work expenses such as home office supplies.

Look for skills from other industries

As the post-pandemic economic landscape continues to evolve, talent acquisition is evolving with it. If recruiting for a new position, small business owners may find highly qualified individuals who may be seeking a career change or looking to tap into a new industry. It is important for small business owners to be open to experience across industries, which can bring new depth to a team.

Competing for top-notch talent is one of the many challenges for small businesses. By evaluating company culture and how it impacts employees at their core, small business owners will be on par to compete with large corporations for the ideal candidate. And once on board, quality employees will want to stay.

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Jill Chapman is a senior performance consultant with Insperity, a leading provider of human resources and business performance solutions.

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World's largest student startup competition names teams for 2025 Houston event

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The Rice Alliance for Technology and Entrepreneurship has announced the 42 student-led teams worldwide that will compete in the 25th annual Rice Business Plan Competition this spring.

The highly competitive event, known as one of the world’s largest and richest intercollegiate student startup challenges, will take place April 10–12 at Houston's The Ion. Teams in this year's competition represent 34 universities from four countries, including one team from Rice.

Graduate student-led teams from colleges or universities around the world will present their plans before more than 300 angel, venture capital, and corporate investors to compete for more than $1 million in prizes. Last year, top teams were awarded $1.5 million in investment and cash prizes.

The 2025 invitees include:

  • 3rd-i, University of Miami
  • AG3 Labs, Michigan State University
  • Arcticedge Technologies, University of Waterloo
  • Ark Health, University of Chicago
  • Automatic AI, University of Mississippi and University of New Orleans
  • Bobica Bars, Rowan University
  • Carbon Salary, Washington University in St. Louis
  • Carmine Minerals, California State University, San Bernardino
  • Celal-Mex, Monterrey Institute of Technology and Higher Education
  • CELLECT Laboratories, University of Waterloo
  • ECHO Solutions, University of Houston
  • EDUrain, University of Missouri-St. Louis
  • Eutrobac, University of California, Santa Cruz
  • FarmSmart.ai, Louisiana State University
  • Fetal Therapy Technologies, Johns Hopkins University
  • GreenLIB Materials, University of Ottawa
  • Humimic Biosystems, University of Arkansas
  • HydroHaul, Harvard University
  • Intero Biosystems, University of Michigan
  • Interplay, University of Missouri-Kansas City
  • MabLab, Harvard University
  • Microvitality, Tufts University
  • Mito Robotics, Carnegie Mellon University
  • Motmot, Michigan State University
  • Mud Rat, University of Connecticut
  • Nanoborne, University of Texas at Austin
  • NerView Surgical, McMaster University
  • NeuroFore, Washington University in St. Louis
  • Novus, Stanford University
  • OAQ, University of Toronto
  • Parthian Baattery Solutions, Columbia University
  • Pattern Materials, Rice University
  • Photon Queue, University of Illinois, Urbana-Champaign
  • re.solution, RWTH Aachen University
  • Rise Media, Yale University
  • Rivulet, University of Cambridge and Dartmouth College
  • Sabana, Carnegie Mellon University
  • SearchOwl, Case Western Reserve University
  • Six Carbons, Indiana University
  • Songscription, Stanford University
  • Watermarked.ai, University of Illinois, Urbana-Champaign
  • Xatoms, University of Toronto

This year's group joins more than 868 RBPC alums that have raised more than $6.1 billion in capital with 59 successful exits, according to the Rice Alliance.

Last year, Harvard's MesaQuantum, which was developing accurate and precise chip-scale clocks, took home the biggest sum of $335,000. While not named as a finalist, the team secured the most funding across a few prizes.

Protein Pints, a high-protein, low-sugar ice cream product from Michigan State University, won first place and the $150,000 GOOSE Capital Investment Grand Prize, as well as other prizes, bringing its total to $251,000.

Tesla recalling more than 375,000 vehicles due to power steering issue

Tesla Talk

Tesla is recalling more than 375,000 vehicles due to a power steering issue.

The recall is for certain 2023 Model 3 and Model Y vehicles operating software prior to 2023.38.4, according to the National Highway Traffic Safety Administration.

The printed circuit board for the electronic power steering assist may become overstressed, causing a loss of power steering assist when the vehicle reaches a stop and then accelerates again, the agency said.

The loss of power could required more effort to control the car by drivers, particularly at low speeds, increasing the risk of a crash.

Tesla isn't aware of any crashes, injuries, or deaths related to the condition.

The electric vehicle maker headed by Elon Musk has released a free software update to address the issue.

Letters are expected to be sent to vehicle owners on March 25. Owners may contact Tesla customer service at 1-877-798-3752 or the NHTSA at 1-888-327-4236.

Houston space tech companies land $25 million from Texas commission

Out Of This World

Two Houston aerospace companies have collectively received $25 million in grants from the Texas Space Commission.

Starlab Space picked up a $15 million grant, and Intuitive Machines gained a $10 million grant, according to a Space Commission news release.

Starlab Space says the money will help it develop the Systems Integration Lab in Webster, which will feature two components — the main lab and a software verification facility. The integration lab will aid creation of Starlab’s commercial space station.

“To ensure the success of our future space missions, we are starting with state-of-the-art testing facilities that will include the closest approximation to the flight environment as possible and allow us to verify requirements and validate the design of the Starlab space station,” Starlab CEO Tim Kopra said in a news release.

Starlab’s grant comes on top of a $217.5 million award from NASA to help eventually transition activity from the soon-to-be-retired International Space Station to new commercial destinations.

Intuitive Machines is a space exploration, infrastructure and services company. Among its projects are a lunar lander designed to land on the moon and a lunar rover designed for astronauts to travel on the moon’s surface.

The grants come from the Space Commission’s Space Exploration and Aeronautics Research Fund, which recently awarded $47.7 million to Texas companies.

Other recipients were:

  • Cedar Park-based Firefly Aerospace, which received $8.2 million
  • Brownsville-based Space Exploration Technologies (SpaceX), which received $7.5 million
  • Van Horn-based Blue Origin, which received $7 million

Gwen Griffin, chair of the commission, says the grants “will support Texas companies as we grow commercial, military, and civil aerospace activity across the state.”

State lawmakers established the commission in 2023, along with the Texas Aerospace Research & Space Economy Consortium, to bolster the state’s space industry.

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